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Politics & Government

Arena Project Could Cost Parkland

School district won't hear until June how much tax revenue it will lose to Allentown hockey project.

won’t know how much tax revenue it could lose to Allentown’s new Neighborhood Improvement Zone until just days before the district expects to pass its budget.

Parkland is already facing an $853,000 budget gap for the 2012-2013 year and that could grow as Allentown’s Neighborhood Improvement Zone, or NIZ, gets to keep earned income taxes from Parkland residents who work at jobs within the zone. The NIZ was created to help fund the city’s new hockey arena and redevelop other areas downtown and on its waterfront.

That special tax incentive zone is expected in earned income taxes from surrounding municipalities and school districts, but no breakdown of cost for each municipality is currently available.  John Vignone, Parkland director of business administration, says the district isn’t likely to learn how much it will lose until June 1.

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“Is that number going to be a manageable number or a scary number?” Vignone asked rhetorically.

That figure will come from Berkheimer Tax Associates of Wind Gap, which is the earned income tax collector for all of Lehigh County, Vignone said. The reason Parkland can’t estimate its loss is it doesn’t know the exact boundaries of the NIZ and what businesses will be included, he said. 

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“We can’t build that money into the school district budget,” said Board Member Roberta Marcus.

On Tuesday, Vignone and C. Steven Miller, district solicitor, briefed the school board on how the approximately 125-acre NIZ works. Vignone said the district currently has no plans to join Hanover and Bethlehem townships against the arena project but added that Parkland isn’t ruling anything out. 

Until the NIZ was enacted, the local earned income tax of 1 percent levied on residents of South Whitehall, Upper Macungie and North Whitehall was split evenly between Parkland and each resident’s municipality, Miller said. Now for those residents employed in the improvement district, that 1 percent would go toward the NIZ.

Miller said some of the earned income tax money taken by the NIZ might be refunded.

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